By Brian David, Adoption and Usage Director , John Horrigan, Consumer Research Director, and Scott Wallsten, Economics Director (Adoption and Usage Team)
For those following how the Broadband Task Force has characterized the problem of non-adoption, the term “cost of digital exclusion” is familiar. The idea has roots in the academic literature, where Rahul Tongia and Ernest Wilson have argued in “Turning Metcalfe on His Head: The Multiple Costs of Network Exclusion” that the costs of not being online rise faster than the growth of the network. Blair Levin’s “Wired for Social Justice” speech touched on this idea in noting the societal benefits that come about from getting more people online.
A new report prepared by the Digital Impact Group and Econsult Corporation (DIG/EC) adds to the discussion by attempting to quantify the economic impacts associated with digital exclusion. The DIG/EC report, The Economic Impact of Digital Exclusion, finds that the aggregate costs of having one-third of the nation without broadband access comes to $55 billion per year when looking across 11 areas of impact (e.g., health, education, economic opportunity).
We note that the estimated cost should be approached cautiously. In addition to the inherent data-related challenges in this kind of undertaking, the report explicitly does not attempt to estimate the net benefits - it does not include the cost of programs that may be necessary to bring about the growth in broadband access that create the estimated benefits.
Nonetheless, we hope that the DIG/EC study will spur an ongoing discussion of the costs of digital exclusion. Such a discussion among policy-makers, practitioners and economists is crucial to building an inclusive broadband future. As Mark Cooper of the Consumer Federation of America (CFA) observed in The Challenge of Digital Exclusion in America: A Review of the Social Science Literature and Its Implications for the U.S. National Broadband Plan, “digital exclusion can be seen as exacerbating the underlying problems of social exclusion and inequality.” The DIG/EC study helps us think of the potential opportunities that may come about if more people have broadband access, while challenging analysts to do more to understand the costs of getting there.
As we approached today's Digital Inclusion Summit, DIG/EDC and CFA remind us of the stakes involved with closing gaps in home broadband access. Broadband is a pathway to benefits that the already-wired among us take for granted: news about our communities and government, better understanding of health care challenges, more information for purchase decisions and job search, and staying in touch with family and friends. The DIG/EC study helps us think in dollar terms about the potential scope of benefits, and CFA focuses on how digital exclusion can harden established patterns of inequality – possibly making it even more costly over time to address access gaps. Stayed tuned for how the Broadband Plan proposes to address these gaps.